Tag: property law

On June 30 of this year the Court of Appeals of New York issued its final ruling in Wallach v. Town of Dryden, holding that municipalities in New York State have the authority to exclude hydraulic fracturing from their borders through zoning.[1] Although the case hinged upon the interpretation of a New York statute with no reach beyond the state’s borders, the Town of Dryden decision has significance for supporters and opponents of hydraulic fracturing throughout the country as a sign that local governments may erect serious barriers to the controversial practice even in the absence of stringent Federal or state regulation.

Dryden, a town of less than 15,000 people located outside of Ithaca, New York, prohibits all “industrial” development within town borders through its zoning code.[2] In August 2011 the town amended its zoning ordinance to specify that all activities related to oil and gas extraction are included in this general prohibition on industrial development.[3] Anschutz Exploration Corporation, an energy company that held leases to oil and gas rights on several Dryden properties, sued the town in New York State court in September 2011, arguing that New York’s Oil, Gas and Solution Mining Law (“OGSL”)[4]preempted the amendment. Dryden prevailed on a motion for summary judgment, which was affirmed by state appellate court; the case reached New York’s highest court in summer 2014.[5]

The legal issue in the case was whether OGSL’s supersession clause, which states that the OGSL supersedes all “local laws or ordinances relating to the regulation of the oil, gas and solution mining industries,”[6] prevented towns like Dryden from passing zoning ordinances that exclude hydraulic fracturing. To answer this question, the Court of Appeals engaged in a straightforward exercise in statutory interpretation. Examining the plain language, statutory scheme, and legislative history of the law, the Court concluded that the supersession clause was intended to prevent municipalities from directly regulating oil and gas development—i.e., imposing specific technical and operational requirements on drillers.[7] Finding no indication that the OGSL was intended to curtail towns’ traditional home rule authority to enact zoning ordinances, the Court held that Dryden’s zoning amendment is not precluded under the supersession clause and affirmed the intermediate appellate court’s decision.[8]

The Court of Appeals decision vindicated hydraulic fracturing bans and moratoria enacted in Dryden and 179 other municipalities, with an additional 86 municipalities considering similar measures as of October 9, 2014. Many of these towns are underlain by the Marcellus Shale formation—estimated to be the largest natural gas reserves of any formation in the United States—and in the long run these ordinances could permanently place large quantities of natural gas beyond the reach of extractors. However, the Town of Dryden did not have the immediate effect of halting any ongoing hydraulic fracturing operations. New York State has had a de facto moratorium on the practice for six years, with Governor Andrew Cuomo’s administration refusing to permit any drilling until a study examining its health impacts is completed. Accordingly, no hydraulic fracturing was actually underway in New York State throughout the Town of Dryden litigation. Of course, if the moratorium is ever lifted, the decision will have real practical effect on the ability of energy companies to exploit New York’s natural gas reserves.

Because Town of Dryden was a state court decision hinging a narrow question of interpretation of a state statute, it has no legal effect beyond New York’s borders. However, the symbolic significance of Dryden’s victory reaches nationwide. Mary Anne Sumne, Dryden’s town supervisor, has expressed hopes for the decision’s impact beyond New York’s borders: “I hope our victory serves as an inspiration to people in Pennsylvania, Ohio, Texas, Colorado, New Mexico, Florida, North Carolina, California and elsewhere who are also trying to do what’s right for their own communities.”

The ability of towns in these states and others to restrict hydraulic fracturing will depend upon the interaction between state-specific home rule jurisprudence and natural resource laws, but Dryden’s high-profile victory has encouraged towns that have enacted similar ordinances from Hawaii to California to Texas. With the national politicians of both political parties largely in support of hydraulic fracturing and state-level governments varying dramatically in their oil and gas extraction regulations, local control efforts such as Dryden’s present one of the most formidable obstacles to the controversial practice.

The Fifth Amendment’s Takings Clause provides that private property shall not be “taken for public use, without just compensation.” For most of American history, the Supreme Court construed this clause narrowly, requiring the government to pay compensation only where it permanently appropriated or destroyed property. During the twentieth century, however, the Court began to embrace a significantly broader interpretation of the Takings Clause. In 1922, the Court introduced the concept of regulatory takings, holding in Pennsylvania Coal Company v. Mahon that the government was required to pay compensation if its laws or regulations went “too far” in redefining the range of interests included in the ownership of property. A series of cases during the World War II era established that the government was required to retroactively compensate a property owner for a temporary physical taking. And in 1987, the Court combined these two innovations, holding in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles that the government was required to retroactively compensate a property owner for a temporary regulatory taking.

Last Term, in Arkansas Game and Fish Commission v. United States, the Supreme Court was required to consider the continuing validity of this last development. The Court was confronted with two conflicting precedents: First English, which established the general availability of retroactive compensation for temporary regulatory takings, and Sanguinetti v. United States, a 1924 case holding that the Takings Clause did not require compensation for government-induced flooding unless the flooding constituted a “permanent invasion of the land.” The Court reaffirmed First English while rejecting Sanguinetti, holding by a vote of 8-0 that the federal government was required to retroactively compensate a landowner whose property it temporarily took by flooding.

In this Comment, I argue that the Arkansas Game and Fish Court erred in applying First English without first addressing its continuing validity. Even assuming that First English was correct when it was decided in 1987 — something that is far from clear — it is doubtful that it remains so today. Since First English was decided, the Court has radically reduced the availability of implied damages relief for other constitutional violations. I argue that there is no principled basis for treating temporary regulatory takings differently from other constitutional violations; hence, limiting the availability of implied damages relief under First English is necessary to achieve doctrinal consistency. Further, limiting First English is desirable from a policy perspective, as this would return the question of compensation for temporary regulatory takings to the political process, allowing federal, state, and local governments to balance the public’s interest in regulation with the interests of individual property owners on a case-by-case basis.

When a landowner makes a charitable gift of a conservation easement to a nonprofit organization or government entity and elects to seek a federal tax deduction, both landowner and easement holder are subject to federal tax laws and regulations governing the creation, monitoring, amendment, and extinguishment of the easement. A nonprofit easement holder is subject to federal laws governing nonprofit operations. The nonprofit and government holders are also subject to state laws governing the operations of nonprofit organizations and the administration of charitable and other public assets on behalf of the public. All of these laws affect and restrict the ability of nonprofit and government holders to amend and terminate perpetual conservation easements. Contrary to representations made in When Perpetual Is Not Forever: The Challenge of Changing Conditions, Amendment, and Termination of Conservation Easements, 36 Harv. Envtl. L. Rev. 1 (2012), none of these laws can be ignored.

Minard Run Oil Co. v. United States Forest Service (Minard Run II) presents a traditional story with a unique cast of characters. The common law has long established that within a single parcel of property, the surface and the minerals can be separately owned. Where property has been so divided into a “split estate,” the law presumes that the mineral estate is dominant; unless the deed severing the property provides otherwise, an implied easement burdens the surface estate, permitting the mineral owner to use the surface as may be reasonably necessary to access the minerals. Minard Run II provides a twist on this common split estate arrangement — it asks what happens when a private party owns the minerals of a split estate and the federal government owns the surface. Specifically, in Minard Run II, private mineral owners sought access to oil and gas through surface owned by the federal government and included in a national forest. The case explores the extent to which the U.S. Forest Service, as the land management agency with jurisdiction over the surface, could regulate this surface access. Minard Run II ultimately holds, perhaps surprisingly, that the Forest Service had no regulatory authority beyond what a private surface owner would have in an analogous situation. This constraining outcome, however, was not the result of a flawed opinion, but instead an unexpectedly restrictive statute.

This less common split estate arrangement is prone to litigation. To date, there have been cases involving the Forest Service, the NPS, and the FWS disputing federal regulation of private mineral rights. This Comment will focus on the latest in this series of controversies. In Minard Run II, the U.S. Court of Appeals for the Third Circuit affirmed a preliminary injunction granted to private mineral rights owners in the Allegheny National Forest (“ANF”) that barred the Forest Service from continuing a moratorium on new oil and gas development within the ANF. The Forest Service had intended to continue the moratorium until it completed a forest-wide Environmental Impact Statement (“EIS”) for the ANF. The court rejected the applicability of NEPA, consequently holding that private mineral rights owners do not need Forest Service authorization before disturbing the ANF surface, provided they supply the Forest Service with sufficient notice of their surface use plans. This Comment will describe the factual background of the case, discuss the Court of Appeals’ opinion, and assess Minard Run II in the broader context of split estates involving the federal government as surface owner.

As the use of perpetual conservation easements to protect private property for the public’s benefit grows in popularity, so grow the challenges associated with these perpetually binding promises. Today’s conservation community faces significant challenges to amending and terminating perpetual conservation easements in the face of changing conditions, landscapes, climate, and public interests. Because of variations among different legal regimes’ guidance for perpetual conservation easements, much remains unsettled regarding perpetual conservation easement amendment and termination. This Article examines inconsistencies in the legal regimes and explores current and emerging common law, legislation, and policies addressing perpetual easement amendment and termination. This Article posits that the conservation community can protect the integrity of perpetual conservation easements by providing clear, consistent guidance through existing or new legal frameworks for state legislatures, courts, landowners, and easement holders, and suggests the means to achieve or craft such guidance.

Energy drives economies and quality of life, yet accessible traditional fuels are increasingly scarce. Federal, state, and local governments have thus determined that renewable energy development is essential and have passed substantial requirements for its use. These lofty goals will fail, however, if policymakers rely upon existing institutions to govern renewable development. Renewable fuels are fugitive resources, and ideal property for renewable technology is defined by the strength of the sunlight or wind that flows over it. When a potential site for a utility-scale development is identified, a new piece of property, which I call a “renewable parcel,” is superimposed upon existing boundaries and jurisdictional lines. The entities within the parcel all possess rights to exclude, and this creates a tragedy with anticommons and regulatory commons elements, which hinder renewable development.

In a renewable parcel, numerous rights of exclusion in the form of fee simple ownership, leasing rights, use rights, and regulation make use of a renewable parcel difficult and create anticommons-type problems. The multiple jurisdictions that may underlie the parcel also lead to a regulatory commons, wherein no one government is sufficiently incentivized to create a workable governance regime.

This Article argues that the many exclusion rights within renewable parcels must be consolidated and governed by a regional agency to address these barriers to renewable development, and it analyzes elements of existing regional institutions to begin to suggest the ideal structure of this agency. Once formed, the regional framework
should be applied to other areas of energy planning. States and municipalities share oil and gas reservoirs, electricity transmission constraints, and energy generation needs, and collaborative governance in these areas is necessary for a secure future.

After five years of relative quiet, federal property law doctrine is once again the site of renewed controversy. Last Term, the Supreme Court unanimously rejected a Fifth Amendment takings claim alleged to have occurred when Florida took ownership of newly submerged land after a county beach renourishment project. Importantly, the decision marked the Court’s entrance into a jurisprudential debate over the existence of judicial takings. In doing so, the Court opened up the possibility of a future decision constitutionalizing judicial takings, an arguably unnecessary addition to Takings Clause jurisprudence and possible detriment to the evolution of environmentally- favorable property law.